|
| Permanent Resident Card
| New Tax Treaties
| Home |
The Permanent Resident Card
Among the numerous initiatives brought about by
recent amendments to the Canada Immigration Act is the introduction
of a Permanent Resident Card, also referred to as the Maple Leaf
or PR Card. This wallet-sized card replaces the IMM 1000 (Record
of Landing) as proof of permanent resident status and allows the
holder to re-enter Canada after an absence.
Aside from the obvious security benefits, it is hoped that the
PR Card will encourage permanent residents to apply for Canadian
citizenship status at the earliest opportunity.
New permanent residents who move to Canada after June 28, 2002
are now required to have their photograph taken by immigration
officials when they first land in Canada. This photograph is used
in the production of the PR Card, which is mailed to the applicant's
Canadian residential address shortly thereafter and is valid for
a period of one or five years from date of issuance.
Those Permanent Residents who landed in Canada prior to June 28,
2002 and who have not yet obtained Citizenship status will be
able to apply for their PR Card from October 15, 2002 onward.
Applications will be submitted and reviewed according to a timetable
based on the Permanent Resident's year of landing - with the most
recent permanent residents processed first. For example, those
who landed in 2002 have their applications processed between October
15 and November 30, 2002 whereas those permanent residents who
landed in 2001 will have their applications processed from December
1, 2002 to February 28, 2003, and so on until September 2003 when
those who landed between 1973 and 1979 will be processed.
All PR Card applicants are required to be physically present in
Canada for several steps of the application process.
Applications must be submitted early enough for the processing
and return (to the applicant) before the final deadline of December
31st of 2003. After this date, all Permanent Residents must be
in possession of their PR Card or they will be denied a boarding
pass when traveling to Canada via commercial carriers. The PR
Card will also be the only acceptable evidence of permanent residence
status accepted at any US border (air, marine or vehicular).
The December 2003 deadline should provide a reasonable period
for all Permanent Residents to prepare their PR Card applications,
assuming they have all the required supporting documents in order.
If not, they had better get busy now!
In order to obtain a PR Card, Permanent Residents who landed prior
to June 28, 2002 must provide documentation to prove they have
established a physical presence in Canada. This documentation
will include the following:
· A certified copy of their most recent tax return;
· A complete list of all residential addresses for the
past five years;
· A detailed work and/or education history for the past
five years;
· A detailed list of all absences from Canada during the
past five years; and
· The application-processing fee (which can only be paid
at a financial institution in Canada).
The best proof of residence is, however, a properly
completed tax return. Immigration officials will pay close attention
to those applicants who have not filed Canadian tax returns and
those with incomplete or suspect tax fillings. Those applicants
will be invited by Immigration official to discuss their tax filing
and residency circumstances in detail (including examination of
all tax returns since their initial arrival in Canada). Failure
to satisfy the Immigration official of appropriate physical presence
in Canada will result in the PR Card application being denied.
In other words, the loss of your permanent resident status.
As a final step, the applicant must obtain a declaration from
a Canadian-based guarantor (usually a licensed professional or
government official) confirming that the information provided
by the permanent is true and accurate. The guarantor may be subject
to severe penalties should the permanent resident make any false
declarations in his application.
Meanwhile, Canada Customs and Revenue Agency (CCRA - previously
Revenue Canada) has also been active on the tax front. Penalties
have been increased and very severe sanctions are now being taken
against those who under report or fail to file tax return. For
example, failure to file tax returns for three years is now considered
tax evasion - a criminal offense with severe penalties including
up to two years in prison and seizure of assets to satisfy the
taxes, interest and penalties.
Accordingly, a permanent resident who landed in Canada with his
family in (or prior to) 1999 and then returned to his previous
country of residence to live and work (with or without a Returning
Resident Permit) and who has not filed tax returns for the past
three years, not only faces possible criminal sanctions and financial
penalties in Canada but is also jeopardizing his immigration status.
Based on the gloomy weather forecast that has been predicted,
some of you non-filing or under filing permanent residents may
simply conclude:
"Instead of jumping
through the financial hoops created by the new rules, maybe I
should simply relinquish my permanent resident status. My family
is securely landed and living in Canada and it makes financial
sense for me to continue to earn my tax-free income in the UAE
or Kuwait. If I give up my status in Canada, I won't have to pay
any taxes on my worldwide income, but my family can continue to
reap all the benefits of being permanent residents. By the time
I am ready to retire, they will still be permanent residents or
even citizens and one of them could then sponsor me under the
family reunification rules."
This strategy will, however, be foiled in two ways. Firstly, any
person outside Canada will be deemed to be a Canadian resident
for tax purposes on the basis of having one or more significant
ties (or two or more less significant ties) to Canada. Having
a spouse and dependent children living in Canada is considered
a significant tie. Therefore, for tax purposes, a person may be
regarded as a tax resident even if he has never applied for, or
relinquished, immigration status.
If the person is deemed to have been a tax resident but has failed
to fulfill his tax obligations, he may also be subject to a range
of sanctions including payment of all back taxes with interest,
fines (up to 50% of the taxes owing) and prison. The tax bill
can be satisfied by seizure of assets situated in Canada (house,
vehicles, bank accounts, and investments). Note that the Government
of Canada has numerous tax treaties throughout the world that
allows them to seize assets located in their tax treaty partners'
territories.
If charged and convicted of tax evasion, such an individual would,
as a result, be barred from applying for Permanent Resident Status
in Canada under the family reunification provisions for five years
from the date on which he fulfilled every one of the sanctions
against him.
As a result of these two legal storm fronts - both clearly visible
on the satellite screen - one can no longer rely on the "beat
the system" strategy described above. This strategy is clearly
no longer viable and may have severe consequences, not only for
the individual, but for any family members who, by way of their
own tax returns, be deemed to be complicit in the "tax"
evasion strategy.
<Previous
Page ... New Tax
Treaties>
| top |
|
